Budget proposals receive mixed reaction from pharma sector

The pharma sector representatives said the Union Budget has failed to specifically address imminent challenges directly affecting the key industry, but hailed certain proposals of Finance Minister Arun Jaitley.
The life sciences sector had great expectations from the Budget not only from a fiscal incentive perspective but also from a regulatory angle. Expectations were based on the Government's vision of making India one of the top three pharmaceutical markets by 2020, according to experts.
They, however, welcomed certain Budget proposals.
This year, too, no specific impetus was given to the sector. The move to eradicate certain NCDs, the proposal to set up two new AIIMS, additional post-graduate medical seats, proposed amendments in the Drugs and Cosmetics Rules and new rules for medical devices are welcome.

However, the Budget has not specifically addressed imminent challenges directly affecting the sector, KPMG India National Head-Life Sciences Practice Utkarsh Palnitkar said.
In order to stay competitive in the overseas market and given the uncertain global climate, it was expected that specific impetus or incentives would be given to innovation in the form of weighted deduction on R&D, incentives for patents, exemptions of certain duties and taxes. These demands remained largely un-addressed, giving no specific reason to cheer for the sector as a whole in 2017-18, Palnitkar said.

Glenn Saldanha, Chairman and Managing Director, Glenmark Pharmaceuticals said, overall, the Union Budget is a step in the right direction. Lowering tax on MSMEs is a welcome step that would provide a much-needed fillip by creation of jobs and putting more money in their pockets in all sectors, including pharmaceuticals.

The Government has shown its clear intent towards fast-tracking inflow of FDI, and the scrapping of FIPB is a notable step that would go a long way in supporting the objective of ease of doing business, Saldanha said.
Additionally, the Government's impetus to reduce the borrowing cost and increase access to credit will surely help businesses to grow, he said.
"We see the biggest-ever allocation to the infra sector which would benefit all sectors, including the fast- growing pharmaceuticals. The Finance Minister reiterates his commitment to keep current account deficit and fiscal deficit under control," Saldanha said.
"Draft medical devices rules have been in vogue for

quite some time. It is encouraging to see that the Government will seek to introduce some regulations in the coming year" said Anand Mehta, Partner, Khaitan & Co.
Anjan Bose, Secretary General, NATHEALTH, said "The Budget clearly focuses on improving healthcare access for the less privileged and on "preventive & wellness" both of which are very encouraging. Target of transforming 1.5 lakh health sub-centres into health wellness centres is in line with the need of the hour for the Indian citizens."
Aadhaar-linked health cards for senior citizens and the proposal to increase number of post-graduate medical seats are some of the welcome steps in the Budget, said Prathap C Reddy, Chairman, Apollo Hospitals Group.

"While we were hopeful that healthcare would be accorded a national priority sector status, the structural reform in medical education, in particular the increase in the number of post graduate medical seats and DNB courses is praiseworthy as it was long-awaited.
"The amendment in costs of life-saving drugs and harmonisation of rules for medical devices will all add up to have a positive impact for healthcare in the country," Reddy said in a statement in Hyderabad.
He said the Budget's focus on improving the growth trajectory of the economy, its pronounced thrust on rural development alongside ensuring fiscal consolidation, will certainly have a positive impact in fiscal administration and set the stage for clean and good governance.

"Furthermore, a target of 2025 has been set for the elimination of TB apart from other diseases such as filiaria, leprosy, measles and kala azar are all being targeted, which is a key need of the day in addition to addressing the onslaught of NCDs," Reddy said.
The Budget is not a game changer though it is a positive one, said Satish Reddy, Chairman, Dr Reddy's Lab.
He said there is no strong thrust to bolster the healthcare sector, apart from a mention about improving rural health infra with 1.5 lakh sub-centres being upgraded to health and wellness centres and setting up of two more AIIMS.

"Some amendments have been proposed to the Drugs and Cosmetics Act to provide a fillip for generic medicines but the details need to emerge on what exactly is being proposed. That said, one hoped for more decisive announcements to boost the sector, which did not happen," Satish Reddy said.
The abolition of the Foreign Investments Promotion Board is a big move as it was an impediment to FDI. Initiating reforms have been talked about in this area to increase fund flows into the economy, so we will need to see how the new policy unfolds," he said.
The issue of political funding was addressed at last by capping cash donations. The introduction of electoral bonds is also a welcome move, he added.